Bargains Not Extinct as Travel Costs Rise

The cost of travel has been going up all year and that is making it difficult — but not impossible — to find summertime bargains.

The U.S. travel industry is enjoying greater pricing power in large part because it has succeeded in minimizing the supply of airline seats, hotel rooms and rental cars at a time when demand for these services is rising. Fliers are also paying more as airlines pass along their soaring jet-fuel expenses.

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With Memorial Day, the unofficial start of summer, just around the corner, the sweetest deals may already have been snapped up, travel experts said, though it is still possible to save a few bucks by planning ahead and remaining flexible when it comes to itinerary details. For example:

— Families that can get time off together in June and September will generally find travel to be more affordable, and less crowded, than those taking trips in July and August.

— When visiting coastal towns, consider staying at a hotel that is, say, a one-mile drive — or better yet, walk — from the beach, instead of splurging for the ocean view.

— Begin and end 7-day trips midweek instead of on weekends, when airports are busier and ticket prices tend to be higher.

Guidebook author Pauline Frommer said that while travel Web sites are an effortless way to search thousands of rooms and rates at once, it is also worthwhile to try and negotiate an even better deal over the phone, particularly when dealing with smaller family-owned hotels.

"Sometimes it will work," she said. "Just make sure you're not taking 'No' from somebody who doesn't have the authority to say 'Yes."'

But probably the best strategy of all, Frommer said, is to "look at the places that aren't as popular in summer," such as the Caribbean, Mexico and Australia. Putting up with potentially very hot weather, she added, may just be "part of the deal."

Dick Spencer of Nashville understands this.

He and his wife have visited St. Croix, a U.S. Virgin Island, many times during the summer and they are planning to return this year.

However, even to St. Croix, Spencer found that airfares were noticeably higher this year, and that the least expensive tickets may require flying in a less-roomy 50-seat regional jet.

Still, lodging is significantly cheaper in summer throughout the Caribbean.

Spencer, who is an executive with a biometrics technology provider, said years of frequent business travel have made him a savvy purchaser of airline tickets.

He books flights through the carriers rather than third-party Web sites because in his experience the service is usually better if there is some kind of mixup or an itinerary needs changing. And Spencer said he prefers to start and end his vacations on Wednesdays "both because of the lower number of travelers and because the fares are generally less."

When it comes to rental car rates, consumers have some decent leverage, experts said. Unlike airlines and hotels, many car rental agencies do not charge cancellation fees, so there is no risk in booking early and then, just before the trip, checking to see if the rates have dropped.

These tricks of the trade may be more useful than ever before given that travel costs have climbed across the board:

— Airline ticket prices are on the rise as demand from business and leisure travelers increases at the same time carriers trim are reducing their domestic carrying capacity to keep costs down — a strategy that has also resulted in jam-packed planes. The soaring price of jet fuel has also prompted major carriers to raise fares five times this year. Compared with last year, the average price of the cheapest domestic leisure fares is 4 percent higher than a year ago, according to Harrell Associates, a New York-based consultancy. "Airlines are trying to lean more on price than volume," said John Heimlich, chief economist of the Air Transport Association.

— Hotel rates are climbing for similar reasons. With very few new hotels built in 2005, the existing properties are filling up quickly and from a pricing standpoint "the hotels are back in the driver's seat," said Jan Freitag, a vice president at Smith Travel Research, a Tennessee-based lodging consultant. Room rates are up between 6 and 9 percent from a year ago, with the biggest increases occurring in the luxury market.

— The cost of renting a mid-sized vehicle one week in advance in the U.S. could rise to about $55 during the peak of the summer, according to Neil Abrams, a New York-based consultant. Last year, that figure was closer to $50. With the nation's rental car fleet growing at a "very conservative" rate, Abrams said the industry has been "able to squeeze more from less."

— And for those hitting the road in their own cars, the fuel burden will be hefty. According to the Energy Department, the price of gasoline is expected to average $2.71 a gallon this summer, an increase of 14 percent from last year.

Those extra cents per gallon really piled up for the Hooymans of Appleton, Wis., who recently took a 10-day road trip through the southwest.

Upon returning from the 3,180-mile trip, Pamella Hooyman said her husband added up all of the gasoline and hotel receipts (fuel averaged around $2.94 per gallon and hotels about $120 per night) and decided it would have been better to just fly to Albuquerque.

"We could have gotten there quicker and seen more things," she said.

Hooyman said the rising cost of travel is even putting a dent in the plans of her church group to visit Biloxi, Miss., to help the city rebuild what was lost during last summer's vicious hurricane season. She said the group, Volunteers in Mission, usually travels in two chartered buses carrying about 60 people, but that only half that number is expected this summer due to the run-up in travel costs.

"A lot of our team members are elderly and live on fixed incomes," she said.

Heather Leisman, director of merchandising for the travel Web site Orbitz, a unit of Cendant Corp., said the best value is available for those who book an airfare and hotel at the same time, even though the cost of each will not be broken out. This so-called pricing "opacity" benefits the travel suppliers by making it difficult for customers and competitors to make comparisons.

Travelers can also benefit from very clear pricing that does not change from minute to minute, or even from month to month. For example, many large tour companies typically print the costs of their various packages once a year.

"We don't really do yield management the way airlines and hotels do," said Pam Hoffee, vice president of product and operations at Group Voyagers Inc., which runs Globus and the more budget-oriented Cosmos tours.

Cosmos' "Italian Masterpiece" tour is a 15-day trip with stops in Florence, Rome and Sorrento, priced below $2,800, including airfare, hotels and daily breakfasts. A 15-day trip through Spain, Portugal and Morocco with airfare and hotels is priced below $2,500. Of course, the weak dollar has cut into the purchasing power of Americans once they get to Europe.

Travel agent Maggie Eskicioglu of San Francisco said she just booked a weeklong vacation in Anguilla for a family of four for $4,500, which includes airfare and two rooms at the Ku Hotel.

"There are still discounts and deals to be had," said Minneapolis-based travel expert Terry Trippler. "You just have to be more eagle eyed this year."